March 1, 2011
In this paperwestudy a two-period game between a government and a terrorist, where the terrorist decides whether to stockpile attack resources from the first to the second period. Our results show that the terrorist chooses stockpiling when: (a) the following parameters are in intermediate ranges: the government’s asset valuation, the terrorist’s first-period resource, the government’s unit defense cost, and the terrorist’s unit attack cost; (b) the terrorist’s secondperiodresource is small; and(c) the terrorist’s resource growth factor or discount factor is large. We also compare our model with the one that does not allow terrorist stockpiling. For moderate growth factors and secondperiod resources for the terrorist, the terrorist does not prefer the option of stockpiling. The terrorist prefers stockpiling for the more uncommoncase that the growthfactor for the terrorist’s stockpiled resource is very large and the second-period resource is very small. In contrast, the government always prefers that the terrorist has the stockpiling option.